Continues Improvement

Desh ki Dhadkan Dhak Dhak Go By: o “Hero” is the brand name used by the Munjal brothers for their flagship company Hero Cycles Ltd. o A joint venture between the Hero Group and Honda Motor Company was established in 1984 as the Hero Honda Motors Limited at Dharuhera India. o During the 1980s, the company introduced motorcycles that were popular in India for their fuel economy and low cost. o A popular advertising campaign based on the slogan 'Fill it - Shut it - Forget it' that emphasised the motorcycle's fuel efficiency helped the company grow at a double-digit pace since inception. o Hero Honda has three manufacturing facilities based at Dharuhera, Gurgaon in Haryana and at Hardwar in Uttarakhand. These plants together are capable of churning out 3 million bikes per year. o Hero Honda has a large sales and service network with over 4,500 dealerships and service points across India. o During the fiscal year 2008-09, the company sold 3.7 million bikes, a growth of 12% over last year. In the same year, the company had a market share of 57% in the Indian market. o Hero Honda sells more two wheelers than the second, third and fourth placed two-wheeler companies put together. Hero Honda's bike Hero Honda Splendor, the world's largest- selling motorcycle for the years 2001-2003, selling more than one million units per year. o Total unit sales of 54,02,444 two-wheelers, growth of 17.44 per cent o Total net operating income of Rs. 19401.15 Crores, growth of 22.32 per cent o Net profit after tax at Rs. 1927.90 Crores o Total dividend of 5250% or Rs. 105 per share including Interim Dividend of Rs. 70 per share on face value of each share of Rs. 2 each o Sleek o Achiever o Ambition 133, Ambition 135 o CBZ, CBZ Star, CBZ Xtreme o CD 100, CD 100 SS, CD Dawn, CD Deluxe, CD Deluxe (Self Start) o Glamour, Glamour F.I o Hunk o Karizma, Karizma R, Karizma ZMR FI o Passion, Passion+, Passion Pro o Pleasure o Splendor, Splendor+, Splendor+ (Limited Edition), Super Splendor, Splendor NXG, Splendor PRO o SEGMENTATION: o Demographic segmentation o HERO HONDA segmented the motorcycle market on the basis of age, income. o Age: Each age group of people have different requirements and so, HERO HONDA focused on segment of age group: Age group Engine power Model 18-35 125cc, 150cc, 225cc Glamour, Super Splendor, Hunk, CBZ- Extreme, Karizma 35-50 100cc Pleasure, CD-Dawn, CD-Deluxe, Splendor+, Splendor Pro, Splendor-NXG o Income: Economy: CD 100SS, CD Dawn Executive: Splendor Pro, Super Splendor, Splendor +, Splendor NXG, Glamour Premium: Karizma, Hunk, CBZ Extreme o Gender: Hero Honda segmented its bikes for men and for women it came up with Pleasure (Gearless bike). o TARGETING & POSITIONING o Hero Honda has used product specialisation in the case of splendor by placing Splendor in all markets. o It has also used selective specialization for some of its products, for example, Karizma and Hunk target youth people preferring voluminous and bulky bikes and is a high-end product. o HERO HONDA has positioned its brand as fuel efficient, suitable for Indian roads and longevity engine compare to other bikes in the market. GE matrix M A R K E T G R Cows O W T H M A R K E T S H A R E o Product o Hero Honda Splendor bikes are designed with customer comfort in mind, with a contoured low-slung seat, specially designed handlebar and a strong double-cradle tubular frame. o The suspension system works so well that the customer never realizes what happens between the tires and the bumpy road. Hero Honda splendour+: o Technical specifications o Engine o Type air cooled, 4 stroke, single cylinder o Displacement 97.2 cc o Max.power 7.4 BHP@8000rpm /5.5KW @8000 rpm o Gear box 4 speed constant mesh o Dimensions - L*W*H 1970mm*720mm*1040mm Ground clearance 159mm Fuel tank capacity - 11litres Reserve 1 litre (usable reserve) o Price o Determining price levels and pricing policies is the major factor affecting revenue. o Factors such as the demand for the good, the market price, and customer responsiveness to price changes influence the price levels at hero Honda. o Hero Honda Splendor : o Hero Honda splendor price in delhi-41602/- o Hero Honda splendor price in bangalore- 44502/- o Hero Honda splendor price in chennai-44425/- o Hero Honda splendor price in kolkata-44875/- o Hero Honda splendor price in mumbai- 46024/- Promotions: o THE product line of the hero Honda say’s “Hero Honda desh ki dhadkan” o Advertising of hero Honda is done through o The yellow pages o A press release o Sponsoring a civic event or activity o Eg: o Sponsored '7th World Cup Cricket tournament' at England in 1999 o Sponsored 'India-England Test Series' in 2001 o Sponsored 'India-England Women's Cricket Series' in 2002 o The newspaper o Billboards or posters o Flyers or handbills o Direct mail advertising o Television o The radio o Hero Honda has roped in film actor Hrithik Roshan, Captain of Indian Cricket team Sourav Ganguly, Mohammad Kaif, Harbhajan Singh, Zaheer Khan, Yuvraj Singh and Virender Sehwag as its brand ambassadors. Place o The manufacturer must decide how to distribute their products. o Hero Honda Splendor bikes are positioned all over India. o Strengths:- o Hero Honda Splendor has a strong brand name. The company’s name is synonymous with fuel-efficient bikes and longevity. o A huge market as it has a reputation among customers. o Hero Honda has models/products in almost every bike segment viz. economy (CD Dawn, CD Deluxe), executive (Super Splendor, Splendor+) and premium (Karizma, CBZ). o Ability to understand customer’s needs and wants. o Hero Honda has excellent distribution through franchisees with 4500 dealers for its brand comprising of scooters and bikes. o Hero Honda Splendor is considered as the most reliable bike for Indian roads as it requires low maintenance. o Weakness:- o Slow to react to market changes- Slow innovation- late entrants into the 125 cc segment. o Focuses on only mileage but on power o Imports >31% of its spare parts requirements. o Too much dependence on few models such as splendour which accounts for almost 50% of the company’s turnover. o Opportunity:- o Exports market is yet to be properly exploited. o Launch new bikes in premium segment positioned against Bajaj Pulsar. o Threats:- o All major bike makers in the world are lining up for India. o Bajaj Motors, TVS Motors are strong competitors. o Bajaj Auto has found popularity with both its low- end and premium offerings, which have helped chip away at Hero Honda’s dominance. o Hero Honda Motors Limited is losing a foothold in the exports market which is now dominated by Bajaj. o Hero Honda is completely dependent on Honda for its R&D and new product development. o Bajaj auto o Bajaj Auto was founded in 1926 by Jamnalal Bajaj. o Bajaj entered into a technical collaboration agreement with Kawasaki of Japan o Bajaj Discover 100: Engine: 94.38 cc Price: 41,736 Maximum Power: 7.7 @ 7500 Dimensions: (LxWxH) 2040 x 760 x 1087 mm Ground Clearence: 162 mm o TVS motors o TVS Motor traces its origins back to the entrepreneurial spirit of Trichur Venkagaruswamy Sundaram Iyengar o TVS STAR City: o Engine: 109.7cc o Price: 42,084 o Dimensions: (LxWxH) 2002 x 700 x 1058 mm o Power: 6.1 kW @ 7500 rpm o Dimensions: (LxWxH) 2002 x 700 x 1058 mm o Ground Clearence: 165 mm market share(%) 19 39 hero honda motors bajaj auto 15 TVS motors others 27 Bajaj Discover 100 Tvs StarCity 7.7 Bhp 94.38 cc 109.7 cc o Customer satisfaction is one of the major part of buying behaviour. o Company has to build strong brand awareness and credibility among its customers. o Majority of people are aware about Hero Honda brand. o Hero Honda tries to produce vehicles that attract customers with attractions such as low/zero maintenance cost. o Technically, Bajaj is better compared to others but customers prefer Hero Honda bike due to high resell value and low maintenance. o Introduce more bikes in the premium segment with higher engine displacement. o Increase its fuel efficiency for bikes in lower price range. o Expand to countries that heavily utilize two-wheelers o Improve its after sales service by providing training to mechanics and making them understand the brand image of Hero Honda o Introducing new bikes in women segments competing TVS scooty. .

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